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French government dissolved amid cabinet feud over economy France thrown into political turmoil after government dissolved
(35 minutes later)
France has been thrown into a fresh crisis after President François Hollande told his prime minister to form a new government following a show of insubordination by the country's economy minister. France has entered uncharted political waters after the prime minister, Manuel Valls, presented his government's resignation amid a political crisis triggered by his maverick economy minister who called for an end to austerity policies imposed by Germany.
It is the second reshuffle in five months as the ruling Socialists struggle to pull France out of the economic doldrums. The government is riven by infighting between left-leaning party members and supporters of the prime minister, Manuel Valls, who veer more to the centre. The prime minister, a social democrat who has been compared to Tony Blair, acted with characteristic swiftness in a bid to reassert his authority. His aides had let it be known on Sunday that the economy minister, Arnaud Montebourg, had crossed a "yellow line" for his dual crime of criticising both the president of France and a valued ally.
A statement from the presidency said Valls had offered the resignation of his government – a formality that allows him to form a new cabinet – and the new lineup would be announced on Tuesday. Montebourg, 51, fired his first broadside in an interview with Le Monde on Saturday and followed up with a speech to a Socialist party rally the following day. In a veiled reference to President François Hollande, he said that conformism was an enemy and "my enemy is governing". "France is a free country which shouldn't be aligning itself with the obsessions of the German right," he said, urging a "just and sane resistance".
"The head of state asked him (Valls) to form a team consistent with the direction he has himself set for the country," it said. He was joined in his criticism by the education ,inister Benoit Hamon, who on Monday denied that he had been disloyal. A third minister, Aurélie Filipetti, also appeared in danger of losing her job after wishing a "good day" on Twitter to her two dissident colleagues.
The presidency did not give any reasons, but the move came after the economy minister, Arnaud Montebourg, angered Valls by criticising France's economic direction and the austerity policies of its ally Germany. Hollande, who is politically weakened with his approval rating at an all-time low of 17%, asked Valls to form a new government "consistent with the direction set for the country", which is expected to be announced on Tuesday. Valls has pledged to stick to a course in which deficits would be cut while the tax burden on businesses would be eased, bringing him into conflict with the left wing of the party represented by Montebourg. The changes have not yet been carried out, unemployment is at nearly 11% and growth in 2014 is forecast to be only 0.5%.
"You have to raise your voice. Germany is trapped in an austerity policy that it imposed across Europe," Montebourg said in an interview with Le Monde on Saturday. Now, with the fragmentation of the left bursting into the open, Montebourg is scheduled to deliver a speech later on Monday.
Then in a speech on Sunday, Montebourg said he had asked Hollande and Valls for a "major shift" in economic policy. Centre-right politicians had called for the economy minister to step down, while some Socialists recognised that it was illogical for an economy minister to attack his own government's economic policies. The National Front is demanding the dissolution of parliament.
"Given the seriousness of the economic situation, an economy minister has a duty to offer alternative solutions," he said. The challenge for Valls will be to put together a government that can win the approval of the national assembly, despite the revolt by the Socialist party's left flank and desertion by the ecologists.
Valls, who has consistently said he will not tolerate any form of insubordination among his ministers, has not yet reacted. "We can't rule out the government being thrown out by a majority in parliament, and the president would have to envisage a dissolution of the assembly," constitutional expert Dominique Rousseau told Libération. "The crisis is not over, it's just beginning."
But his aides said on Sunday that Montebourg had crossed a line, and while it is as yet unclear whether he will remain in the government, it appears increasingly unlikely. Analysts said that Valls was likely to keep Hollande loyalists in the cabinet, including the finance minister, Michel Sapin, the agriculture minister, Stephane Le Foll, and the defence minister, Yves Le Drian. But the justice minister, Christiane Taubira, could be among those to pay the price of falling out with Valls.
The 51-year-old leftwing minister is no stranger to controversy, having made headlines in the past for his outspoken criticism of Germany, which he has blamed for factory closures in France. It remains to be seen whether Valls, who became prime minister in March, will be allowed more leeway in forming his new government, compared with the outgoing cabinet that reflected the internal contradictions of Hollande himself. Le Parisien reported on Monday that he had said to Hollande "it's him or me". referring to Montebourg.
He was promoted to his current position in April in a government shakeup after the Socialist party suffered a drubbing at local elections, and has had to cosy up to the finance minister, Michel Sapin, who supports the austerity measures. The crisis is unfolding as politicians already have an eye on the next presidential elections in 2017. Montebourg may now see himself as the flag-bearer of the left, while Valls until now has remained popular in the country as a whole although his popularity ratings have also shrunk.
As industrial renewal minister before his promotion, Montebourg had grabbed headlines by labelling the head of tyre giant Titan an "extremist" after the CEO criticised the French workforce as lazy. The centre-right UMP is also in crisis, however. Former president Nicolas Sarkozy has not yet announced whether he intends to run although he is widely expected to do so. But former prime minister Alain Juppé, mayor of Bordeaux, and former agriculture minister Bruno Lemaire , have said in the last few days that they would take part in a primary.
He also became embroiled in a very public fight with steelmaker ArcelorMittal over the closure of a plant.
The latest reshuffle comes at a time when France is mired in stubbornly slow economic recovery and high unemployment. The central bank warned this month that Hollande had no hope of reaching his target of 1% growth for 2014.
The French economy has been stagnant for the past six months and the government was forced to halve its growth forecast to 0.5% for this year.
Both Hollande and Valls say the answer is their so-called Responsibility Pact that offers businesses €40bn (£32bn) in tax breaks in exchange for a pledge by companies to create 500,000 jobs over three years.
Hollande plans to finance this with €50bn in spending cuts, which has angered those on the left of the party – including Montebourg – who argue that the focus should be on cutting taxes to boost consumer's spending power.